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DECREE

Guiding the application of the Bankruptcy Law to special enterprises and the organization and operation of asset management and liquidation Teams

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 24, 2004 Bankruptcy Law;

Pursuant to the January 14, 2004 Ordinance on Enforcement of Civil Judgments;

At the proposal of the Minister of Planning and Investment and after consulting the Supreme People's Court,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Scope of regulation

This Decree provides for:

1. Criteria for identifying special enterprises directly serving defense and security; enterprises and cooperatives regularly and directly supplying essential public products and services (hereinafter collectively referred to as special enterprises).

2. Application of the Bankruptcy Law to special enterprises.

3. Establishment, organization and operation regulations and dissolution of asset management and liquidation teams involved in the management and liquidation of enterprises and cooperatives facing bankruptcy, including special enterprises.

4. Application of the Bankruptcy Law to credit institutions and enterprises operating in the financial domain shall comply with separate regulations of the Government.

Article 2.- Subjects of application

This Decree applies to:

1. Enterprises and cooperatives established and registered under the provisions of law, meeting all the criteria and being on the list defined in Articles 3, 4 and 5, Chapter II of this Decree.

2. Asset management and liquidation teams.

3. Agencies, organizations and individuals involved in the settlement of petitions for enterprise or cooperative bankruptcy.

Chapter II

IDENTIFICATION OF SPECIAL ENTERPRISES AND APPLICATION OF THE BANKRUPTCY LAW THERETO

Article 3.- Criteria for identifying special enterprises directly serving defense and security

Special enterprises directly serving defense and security which are regulated by this Decree are those meeting the following criteria:

1. Being established to directly perform stable and regular tasks in domains or geographical areas in direct service of defense, security or assurance of national secrets.

2. Having 100% of their charter capital owned by the State.

3. Receiving stable and regular orders or plans from the State for the production of one or several public products or the provision of one or several public services to perform defense and security tasks on List A in the Annex to the Government's Decree No. 31/2005/ND-CP of March 11, 2005, on production of public products and provision of public services.

4. Holding an important position and their bankruptcy likely to directly affect defense, security or social order.

Article 4.- Criteria for identifying enterprises and cooperatives regularly and directly supplying essential public products or services

Enterprises and cooperatives identified as those regularly and directly supplying essential public products and services and governed by this Decree should meet the following criteria:

1. Directly supplying essential products or services for the socio-economic life of the country or a population community in a geographical area. In case of supply of essential products or services for a population community in a geographical area, an additional condition that there are no other enterprises or cooperatives supplying the same products or services in the area should also be satisfied.

2. Receiving from competent state agencies supply orders or plans with prices or charges set by the State.

Article 5.- Making and promulgation of lists of special enterprises

1. On the basis of criteria specified in Article 3 and Article 4 of this Decree, annually or in case of necessity:

a/ The Minister of Defense, the Minister of Public Security and the director of the Government Cipher Commission shall make and promulgate lists of special enterprises; add or delete enterprise names to/from lists of enterprises directly serving defense, security and cipher.

b/ Ministers, heads of ministerial-level agencies and heads of government-attached agencies managing branches or domains, presidents of provincial-level People's Committees shall make and promulgate lists of special enterprises; add or delete enterprise names to/from lists of enterprises or cooperatives regularly and directly supplying essential public products or services in branches, domains or localities under their respective management.

2. For member enterprises of state corporations, subsidiary companies of groups of parent and subsidiary companies or economic conglomerates, the boards of management of state corporations or parent companies of groups of parent and subsidiary companies or economic conglomerates shall make lists of enterprises regularly and directly supplying essential public products or services and propose ministers managing branches or domains or presidents of provincial-level People's Committees to recognize such enterprises as special ones.

Article 6.- Notification of petitions for institution of bankruptcy proceedings

1. Upon receiving petitions for institution of bankruptcy proceedings with respect to special enterprises from subjects defined in Articles 13, 14, 15, 16, 17 and 18 of the Bankruptcy Law, the court shall notify such to:

a/ The Ministry of Defense, the Ministry of Public Security or the Government Cipher Commission, for special enterprises directly serving defense, security or cipher;

b/ Ministries, ministerial-level agencies or government-attached agencies performing state management of branches or domains or provincial-level People's Committees, for enterprises or cooperatives regularly and directly supplying essential public products or services under supply orders or plans of such ministries, ministerial-level agencies or government-attached agencies;

c/ Owners of special enterprises (except where petitioners are lawful representatives of the enterprises).

2. When performing its functions and tasks, if seeing that the special enterprise in question is incapable of paying off due debts, the court, procuracy, inspection agency, capital management agency, audit organization or enterprise establishment-deciding agency other than the state owner of this enterprise shall issue written notifications to the subjects defined in Clause 1 of this Article.

Article 7.- Responsibilities of state agencies and special enterprises

1. Upon receiving notifications of the court or concerned state agencies on the insolvency of enterprises or cooperatives listed as special enterprises or information on the risk of insolvency of these enterprises, the subjects defined in Clause 1, Article 6 of this Decree shall have the following responsibilities:

a/ The Minister of Defense, the Minister of Public Security or the director of the Government Cipher Commission shall request special enterprises directly serving defense, security or cipher to make reports on their risk of insolvency;

b/ Ministers, heads of ministerial-level agencies or government-attached agencies performing state management of branches or domains or presidents of provincial-level People's Committees shall request enterprises or cooperatives regularly and directly supplying essential public products or services under supply orders or plans of such ministries, ministerial-level agencies or government-attached agencies to make reports on their risk of insolvency.

2. In case of perceiving the risk of insolvency or before deciding to file a petition for institution of bankruptcy proceedings, a special enterprise shall make a report on its risk of insolvency signed by its lawful representative and send it to the owner and related state management agency defined in Clause 1, Article 6 of this Decree.

3. A report on the risk of insolvency shall be made in accordance with the provisions of this Decree and relevant provisions of law and contain at least the following contents:

a/ The enterprise's actual financial status;

b/ Causes of the risk of insolvency and measures already applied to redress such risk;

c/ Expected measures to be applied to redress the risk, including transfer of all of the enterprise's activities to another similar enterprise or merger into another enterprise;

d/ Responsibilities of related individuals.

Article 8.- Application of necessary measures to restore solvency and business operations

1. Within 15 days after receiving the report, basing themselves on their powers prescribed by law and the provisions of this Decree:

a/ The Minister of Defense, the Minister of Public Security or the director of the Government Cipher Commission shall make decision whether or not to apply necessary measures as provided for by law to restore the solvency and business operations of special enterprises directly serving defense, security or cipher. If the application of such measures falls beyond the capability and competence of the Ministry of Defense, the Ministry of Public Security or the Government Cipher Commission, the Minister of Defense, the Minister of Public Security or the director of the Government Cipher Commission shall report such to the Prime Minister for consideration and decision on the application of such measures.

b/ Ministers, heads of ministerial-level agencies or government-attached agencies performing state management of branches or domains, presidents of provincial-level People's Committees or owners of enterprises or cooperatives regularly and directly supplying essential public products or services shall make decision whether or not to apply necessary measures as provided for by law to restore the solvency and business operations of such enterprises or cooperatives.

2. In case of deciding to terminate the application of necessary measures to restore solvency and business operations or after having applied necessary measures to restore solvency and business operations but the enterprises still cannot restore their solvency and pay their due debts upon request of creditors, the Minister of Defense, the Minister of Public Security, the director of the Government Cipher Commission, other ministers, heads of ministerial-level agencies or government-attached agencies performing state management of branches or domains or presidents of provincial-level People's Committees, owners of the enterprises or cooperatives, chairmen of the boards of management of state corporations with member enterprises or parent companies with subsidiary companies being special enterprises shall notify in writing the court, petitioners and creditors of the non-application or termination of the application of measures to restore solvency and business operations of the enterprises or cooperatives concerned.

Article 9.- Acceptance of petitions for institution of bankruptcy proceedings with respect to special enterprises

The court shall accept petitions for institution of bankruptcy proceedings with respect to special enterprises after receiving written notifications of the following agencies, organizations or individuals:

1. Notifications of the Minister of Defense, the Minister of Public Security or the director of the Government Cipher Commission on the non-application or termination of the application of measures to restore solvency and business operations of special enterprises directly serving defense, security or cipher since such enterprises still cannot restore their solvency and pay their due debts.

2. Notifications of ministers, heads of ministerial-level agencies or government-attached agencies performing state management of branches or domains or presidents of provincial-level People's Committees, chairmen of the boards of management of state corporations with member enterprises or parent companies with subsidiary companies being special enterprises or owners of the enterprises or cooperatives on the non-application or termination of the application of measures to restore solvency and business operations of enterprises or cooperatives regularly and directly supplying essential public products or services since such enterprises or cooperatives still cannot restore their business operations and pay their due debts.

Article 10.- Bankruptcy proceedings

After receiving notifications on the non-application or termination of the application of measures to restore solvency and business operations as stipulated in Article 8 and Article 9 of this Decree and carrying out proceedings specified in Article 22 and Article 23 of the Bankruptcy Law, judges shall make either of the following decisions:

1. To institute and carry out bankruptcy proceedings as provided for in the Bankruptcy Law, this Decree and relevant laws in the following circumstances:

a/ The special enterprise is not entitled to the application of necessary measures by the State to restore its solvency and business operations;

b/ The special enterprise has been subjected by the State to necessary measures to restore its solvency and business operations but it still cannot restore its business operation and pay its due debts while more than half of its unsecured creditors representing two-thirds or more of total unsecured debts request organization of a creditors' meeting.

2. To open bankruptcy proceedings and immediately carry out proceedings for liquidating enterprise assets, for special enterprises which have been subjected by the State to necessary measures to restore their solvency and business operations but still cannot restore their business operation and pay their due debts upon request of creditors and when less than half of their unsecured creditors representing two-thirds or more of total unsecured debts request organization of a creditors' meeting. The procedures for liquidation and bankruptcy declaration shall comply with the provisions of the Bankruptcy Law, this Decree and other relevant provisions of law.

Article 11.- Disclosure of information on special enterprises directly serving defense and security

When carrying out bankruptcy proceedings with respect to special enterprises directly serving defense or security, the head of the asset management and liquidation team set up under Article 16 of this Decree shall consult the Ministry of Defense, the Ministry of Public Security and the Government Cipher Commission on the disclosure of information thereon. In case such disclosure may place defense and security activities at a disadvantage, the head of the asset management and liquidation team shall have to propose the judge to make a decision not to disclose information on the bankruptcy of such enterprises as in ordinary cases of bankruptcy.

Article 12.- Liquidation of assets of special enterprises

1. The liquidation of assets of a special enterprise shall be carried out according to the following procedures and in the following priority order:

a/ Auctioning the whole enterprise to an entity operating in the same business line for continued business;

b/ Auctioning the whole enterprise to other entities in case there is no entity operating in the same business line which participates in the auction to buy the enterprise for continued business;

c/ Selling the whole enterprise directly to the entity operating in the same business line for continued business in case such entity is the sole registered buyer;

d/ Auctioning assets one by one in case the auction of the whole enterprise fails;

e/ Selling assets directly to buyers in case the auction of assets one by one fails or when the value of such assets is lower than the level subject to auction as prescribed by law.

2. Enterprises or assets in the defense, security and cipher domains which are not allowed to be put up for auction shall be sold directly to the entities operating in the same business line for continued business operation. The lists of enterprises or assets not allowed to be put up for auction to entities operating outside the defense, security or cipher domain shall be stipulated by the Ministry of Defense, the Ministry of Public Security and the Government Cipher Commission.

3. The sale of the whole of a state enterprise shall comply with the provisions on the sale of enterprises in the Government's Decree No. 80/2005/ND-CP of June 22, 2005, on assignment, sale, business contracting and lease of state companies; and on the auction of state companies in the Prime Minister's Decision No. 330/2005/QD-TTg of December 13, 2005. The sale of the whole of a non-state enterprise shall comply with the guidance of the Ministry of Finance. The sale of assets shall comply with the provisions of the Government's Decree No. 05/2005/ND-CP of January 18, 2005, on property auction.

Article 13.- Payment of secured debts and return of assets to the State

Special enterprises shall perform the following property liabilities before dividing the value of their assets:

1. To pay debts secured with the asset mortgage or pledge which was established before the court accepts the petition for institution of bankruptcy proceedings to secured creditors under the provisions of Article 35 of the Bankruptcy Law.

2. To return to the State the value of assets used upon the application of necessary measures to restore solvency and business operations under the provisions of Article 36 of the Bankruptcy Law.

Article 14.- Order of division of assets

After discharging property liabilities mentioned in Article 13 of this Decree, the value of assets of special enterprises shall be divided in the order specified in Article 37 of the Bankruptcy Law.

Chapter III

ORGANIZATION AND OPERATION OF ASSET MANAGEMENT AND LIQUIDATION TEAMS

Article 15.- Composition of asset management and liquidation teams

An asset management and liquidation team is composed of:

1. An individual enforcer of the judgment enforcement body at the same level with the court competent to accept petitions for institution of bankruptcy proceedings as head of the team.

2. A staff of the People's Court competent to accept petitions for institution of bankruptcy proceedings.

3. A representative of the creditor being an organization or individual having the biggest debt among creditors.

4. A lawful representative of the enterprise or cooperative subjected to bankruptcy proceedings.

5. For the following enterprises or cooperatives facing bankrupcy, on a case-by-case basis, the judge shall consider and decide on representatives participating in the asset management and liquidation team:

a/ A representative of the trade union or laborers (in enterprises where there is no trade organization), for enterprises or cooperatives owing salaries or other debts to laborers;

b/ A representative of the Ministry of Defense, the Ministry of Public Security or the Government Cipher Commission, for special enterprises directly serving defense, security or cipher in the domain under the management of such agency;

c/ For enterprises or cooperatives operating in the banking, financial or insurance domain, there must be a representative of the state management agency in charge of banking, finance or insurance to participate in the asset management and liquidation team. For enterprises or cooperatives participating in deposit insurance, there must be a representative of the deposit insurance organization to participate in the asset management and liquidation team.

d/ A representative of the ministry, ministerial-level agency or government-attached agency managing the branch or domain of essential public products or services which the enterprise or cooperative regularly and directly supplies; a representative of the provincial-level People's Committee of the locality where the enterprise or cooperative regularly and directly supplies public products or services.

6. Agencies and organizations specified in Clause 5 of this Article shall have to appoint their representatives to join in the asset management and liquidation teams at the request of the judge.

Article 16.- Setting up of asset management and liquidation teams

1. At the same time with issuing a decision to institute bankruptcy proceedings, the judge shall send a written request to the concerned agencies, organizations and individuals specified in Article 15 of this Decree to appoint persons to participate in the asset management and liquidation team. Within 5 (five) working days after receiving the written request of the judge, the concerned agencies, organizations and individuals shall have to appoint persons to participate in the asset management and liquidation team.

2. The judge shall issue a decision to set up an asset management and liquidation team to manage and liquidate assets of the enterprise or cooperative facing bankruptcy. One person may concurrently join in no more than 3 (three) asset management and liquidation teams. If having plausible reasons, those who are appointed to join in an asset management and liquidation team may decline such appointment. In special cases, an enforcer may concurrently join in 6 (six) asset management and liquidation teams if it is so approved by the judge.

3. A decision on setting up an asset management and liquidation team shall clearly indicate the full names, occupations, positions and employing agencies of the head and other members of the team. This decision shall be notified to the president of the People's Court with competence to accept petitions for institution of bankruptcy proceedings, the People's Procuracy of the same level, the enterprise or cooperative subjected to bankruptcy proceedings, the petitioner for institution of bankruptcy proceedings and be publicly posted at the head office of the People's Court.

Article 17.- Change of the composition of asset management and liquidation teams

1. In case the appointed person refuses to participate in the asset management and liquidation or there are grounds to believe that the person appointed to participate in the asset management and liquidation team will be biased in or incapable of performing his tasks, the judge may request the concerned agency or organization to appoint another person. Within 5 (five) working days after receiving such request, the concerned agency or organization shall have to appoint a substitute person.

2. In the course of carrying out bankruptcy proceedings, if the creditors' representative in the asset management and liquidation team is incapable of discharging the team's duties, the judge may request another representative to be selected at a creditors' meeting. Creditors shall have to hold a meeting to select a substitute person within 5 (five) working days after receiving the judge's request.

3. Replaced members of an asset management and liquidation team may file a complaint about their replacement with the president of the People's Court with competence to carry out bankruptcy proceedings. Within 5 (five) working days after receiving such a complaint, the president of the concerned People's Court shall consider and settle the complaint. The decision of the president of the People's Court shall be the final one.

Article 18.- Dissolution of asset management and liquidation teams

An asset management and liquidation team shall be dissolved in the following cases:

1. The judge issues a decision recognizing the resolution of the creditors' meeting on the plan for restoring business operations of the enterprise or cooperative facing bankruptcy under the provisions of Article 72 of the Bankruptcy Law.

2. The judge issues a decision stopping asset liquidation proceedings under the provisions of Article 85 of the Bankruptcy Law.

Article 19.- Re-setting up of asset management and liquidation teams

In case the asset management and liquidation team has been dissolved under the provisions of Clause 1, Article 18 of this Decree for the enterprise or cooperative to comply with the resolution of the creditors' meeting in the plan for restoring its business operations but the enterprise or cooperative has improperly implemented or fails to implement such plan under the provisions of Clause 3, Article 80 of the Bankruptcy Law, the judge shall issue a decision to re-set up an asset management and liquidation team to liquidate assets of the enterprise or cooperative under the provisions of the Bankruptcy Law.

Article 20.- Operation principles and working regime of asset management and liquidation teams

1. An asset management and liquidation team shall work under the direction of its leader and the supervision of the judge. Members of an asset management and liquidation team shall perform their tasks and powers under the provisions of the Bankruptcy Law and this Decree and take responsibility before law for their work. Depending on the nature and contents of each job, the leader of the asset management and liquidation team shall assign team members to perform those jobs defined in Article 10 of the Bankruptcy Law. Upon the issuance of the decision on setting up an asset management and liquidation team, the leader of the team shall hold the first meeting to assign specific tasks to each of its members and inform them of the team's working venue and plan under the provisions of Article 10 of the Bankruptcy Law.

2. A meeting of the asset management and liquidation team may be held only when it is participated by at least two-thirds of the total number of its members. Decisions of the asset management and liquidation team shall be adopted only when they are approved by a majority of the members present at the meeting; in case the numbers of votes for and against are equal, the leader's opinion shall be the decision.

3. In the course of operation, the asset management and liquidation team may use material foundations of the civil judgment enforcement body and the People's Court. Concerned state agencies and organizations shall, within the scope of their functions and powers, be obliged to assist the asset management and liquidation teams in performing their assigned tasks.

4. Records and documents related to activities of an asset management and liquidation team shall be kept at the judgment enforcement body and the court and managed by the team leader. In case the enterprise or cooperative is declared bankrupt and the asset management and liquidation team is dissolved, all files related to activities of the asset management and liquidation team shall be stored at the People's Court which has accepted the petition for institution of bankruptcy proceedings. All transaction papers related to activities of the asset management and liquidation team must be signed and stamped by the judge or a competent enforcer.

5. An asset management and liquidation team shall open its own account in service of the management and liquidation of assets of the enterprise or cooperative facing bankruptcy.

6. The leader of an asset management and liquidation team shall be entitled to use the stamp of the court or judgment enforcement body.

7. The leader and members of an asset management and liquidation team shall receive their salaries at the agencies or organizations that have appointed them to participate in the team; and enjoy remuneration according to regulations of the Ministry of Finance.

8. Expenses related to activities of an asset management and liquidation team shall be covered with revenues of the enterprise or cooperative facing bankruptcy. The asset management and liquidation team may advance money from the judgment enforcement body. The accounting of such expenses shall comply with the current accounting regime.

Article 21.- Tasks, powers and responsibilities of leaders of asset management and liquidation teams

1. The enforcer appointed as leader of an asset management and liquidation team shall still join in professional activities at the judgment enforcement body and take professional responsibility to the head of the judgment enforcement body.

2. The leader of an asset management and liquidation team shall have the following tasks and powers:

a/ To guide the asset management and liquidation team to perform its tasks and powers defined in Article 10 of the Bankruptcy Law;

b/ To take responsibility to the judge for all activities of the asset management and liquidation team. In case of his/her absence, to authorize a team member to direct the team's work;

c/ To propose the judge to issue decisions to declare the enterprise's or cooperative's transactions invalid and recover the enterprise's or cooperative's assets involved in transactions already conducted in violation of Article 31 of the Bankruptcy Law;

d/ To propose the judge to issue decisions to force the enterprise or cooperative facing bankruptcy to take or refrain from taking certain actions to preserve its assets, serve the asset liquidation or increase its assets;

e/ In case the enterprise or cooperative facing bankruptcy has lent its assets with security not yet registered under the provisions of law, to immediately register security transactions related to such assets at agencies designated by law;

f/ To propose the judge to recover assets or the value difference of assets of the enterprise or cooperative subjected to asset liquidation proceedings which have been illegally sold or transferred in the cases specified in Clause 1, Article 43 of the Bankruptcy Law;

g/ When necessary, to open bank accounts for keeping amounts collected from debtors and the proceeds from the auction of assets of the enterprise or cooperative subjected to asset liquidation proceedings; to act as holder of such accounts;

h/ When necessary, to request judgment enforcement accountants to assist the asset management and liquidation team in checking accounting books;

i/ To make decision to apply measures to coerce enforcement of judgments in accordance with the provisions of law on civil judgment enforcement;

j/ To close accounts upon issuance of a decision to dissolve the asset management and liquidation team;

k/ To request concerned state agencies to render assistance (to the asset management and liquidation team) in the course of performing tasks;

l/ To organize execution of decisions of the judge.

3. The leader of an asset management and liquidation team shall take responsibility before law for performing his/her tasks and powers.

Article 22.- Valuation of assets of enterprises or cooperatives facing bankruptcy

1. In case the asset management and liquidation team and the enterprise or cooperative concerned fail to reach agreement on the price of inventoried assets, the leader of the team shall have to hire a valuation organization or set up a valuation council to perform the valuation.

2. For enterprises or cooperatives having VND 30 billion or more in total value of remaining assets indicated in their latest financial statements, such valuation organizations as audit companies, securities companies, price evaluation organizations, domestic or foreign investment banks having the valuation function (hereinafter referred to as valuation organizations for short), shall be hired.

3. For enterprises or cooperatives having less than VND 30 billion in total value of remaining assets indicated in their latest financial statements, a valuation council shall be set up:

a/ A valuation council shall comprise: the leader of the asset management and liquidation team as its head; a representative of the financial agency; representatives of some other related agencies; a representative of creditors of the enterprise or cooperative facing bankruptcy; a representative of the trade union or laborers according to the provisions of Point a, Clause 5, Article 15 of this Decree;

b/ The valuation council shall make decision by majority vote; in case the numbers of votes for and against are equal, the opinion of its head shall be the decision.

4. Valuation organizations and valuation councils shall have to determine the minimum price of the enterprise or cooperative or of all the assets before auction, including also determining the price of assets used as security for loans and assets which the enterprise or cooperative sold within 3 (three) months before the petition for institution of bankruptcy proceedings is accepted.

Article 23.- Enumeration of assets of enterprises or cooperatives

1. The asset management and liquidation team shall draw up a list of existing assets of the enterprise or cooperative, including cash amounts, shares, bonds, valuable papers and property-related rights.

In case of necessity, the asset management and liquidation team may appoint one of its members to work with or the team itself shall work directly with lawful representatives of related agencies, organizations, enterprises or individuals to make clear the asset status of the enterprise.

2. The list of assets shall be collectively adopted by the asset management and liquidation team, signed by its leader and sent to the judge. If detecting other assets, the team shall decide to make adjustments, supplements and/or additions to this list and report such to the judge.

Article 24.- Supervision and inspection of enterprises or cooperatives subjected to bankruptcy proceedings

1. After the issuance of the decision to institute bankruptcy proceedings with respect to the enterprise or cooperative, the asset management and liquidation team shall assign its members to supervise and inspect the use of assets of the enterprise or cooperative.

2. The supervision and inspection shall be conducted over prohibited and restricted acts specified in Article 31 of the Bankruptcy Law and the following activities:

a/ Entering into and performing contracts;

b/ Using, preserving and transferring assets outside contract;

c/ Paying debts arising after the issuance of the decision to institute bankruptcy proceedings.

Article 25.- Proposal on the application of interim urgent measures

In case of necessity, the asset management and liquidation team may propose the judge to issue a decision to apply interim urgent measures to preserve assets of the enterprise or cooperative facing bankruptcy under the provisions of Article 55 of the Bankruptcy Law. The application of these measures shall comply with the provisions of the Civil Procedure Code, the Ordinance on Enforcement of Civil Judgments and guiding legal documents.

Article 26.- Listing of creditors and debtors

1. On the basis of accounting books and debt notices, the asset management and liquidation team shall draw up a list of creditors and debts payable to each creditor; a list of debtors and receivable debts of the enterprise or cooperative facing bankruptcy.

2. Within 15 (fifteen) days after the expiration of the time limit for sending debt claims, the asset management and liquidation team shall have to complete the list of creditors and payable debts.

A list of creditors shall have the following principal details:

a/ Full names and addresses of creditors;

b/ Debts owed to each creditors, including secured, partially secured and unsecured debts, due and undue debts, and derelict debts.

3. At the same time with drawing up the list of creditors and debts, the asset management and liquidation team shall draw up a list of debtors and receivable debts of the enterprise or cooperative facing bankruptcy.

A list of debtors shall have the following principal details:

a/ Full names and addresses of debtors;

b/ Debts owed by each debtors, clearly identifying secured, partially secured debts and unsecured debts, due and undue debts, recoverable and irrecoverable debts.

4. The lists of creditors and debtors shall be publicly posted up at the office of the court carrying out bankruptcy proceedings and the head office of the enterprise or cooperative facing bankruptcy for 10 (ten) working days, counting from the date of start of posting.

In case of force majeure events or objective obstructions, the duration of occurrence of such force majeure events or objective obstructions shall not be counted into the posting time. Past the posting time, the asset management and liquidation team shall have to revise the lists of creditors and debtors according to decisions of the judge and finalize the lists. The enterprise or cooperative facing bankruptcy may lodge complaints about these lists. Within 3 (three) working days after receiving complaints, the court shall have to consider and settle them.

Article 27.- Recovery and management of assets, documents, accounting records and stamps of enterprises or cooperatives subjected to asset liquidation proceedings

1. As soon as the decision to institute asset liquidation proceedings becomes effective, the asset management and liquidation team shall recover and manage assets, documents, accounting books and the seal of the enterprise or cooperative subjected to asset liquidation proceedings.

2. The inventory, valuation and preservation of inventoried assets for recovery shall comply with the provisions of the Civil Procedure Code and the Ordinance on Enforcement of Civil Judgments:

a/ The recovery of assets shall be recorded in three copies, clearly stating the name, quantity, category, conditions and price of each asset (if the asset price has been determined), opinions of the enterprise or cooperative subjected to liquidation proceedings, signed by the asset recovery staff and representatives of involved agencies (if any);

b/ For recovered assets being immovables or movables which are hard or too expensive to transport, measures should be taken to preserve them; in case such preservation is beyond capability, it should be immediately reported to the judge and the head of the judgment enforcement body for handling;

c/ The recovery of property rights shall be notified to the concerned state agency and persons with related rights and interests.

3. Within 30 (thirty) days after the court issues the decision to institute asset liquidation proceedings, the asset management and liquidation team shall have to transfer assets borrowed or leased by the enterprise or cooperative for business activities to the lenders or lessors if the latter can produce papers evidencing ownership of such assets and the lending or lease contracts. Any arising disputes shall be resolved by the court according to the provisions of law.

Article 28.- Auction of assets of enterprises or cooperatives subjected to asset liquidation proceedings

The sale of assets of the enterprise or cooperative subjected to asset liquidation proceedings shall be effected as follows:

1. The leader of the asset management and liquidation team shall be responsible for organizing auction of assets of the enterprise or cooperative facing bankruptcy. Such auction shall be held under the provisions of Clauses 1, 2, and 4, Article 47 and of Article 48 of the Ordinance on Enforcement of Civil Judgments and the Government's Decree No. 05/2005/ND-CP of January 18, 2005, on property auction. The sale of assets banned or restricted from circulation on the market shall comply with relevant provisions of law.

2. The auction of special enterprises shall be held under the provisions of Article 12 of this Decree. Asset management and liquidation teams shall hold auction of special enterprises.

3. All the proceeds collected from the enterprise or cooperative facing bankruptcy shall be deposited in the account of the asset management and liquidation team within 3 (three) working days after the date of collection thereof; any amounts deposited late shall face a fine at the basic interest rate announced by the State Bank at the time of asset liquidation.

Article 29.- Formulation and implementation of asset division plans

1. The leader of the asset management and liquidation team shall have to formulate a plan on asset division and a plan on debt payment and submit them to the judge for consideration and decision; organize the implementation of the plan on division of assets of the enterprise or cooperative subjected to asset liquidation proceedings to creditors strictly according to the judge's decision and in the priority order specified in this Decree.

2. The mode of payment to creditors shall be agreed upon but shall not contravene the provisions of law. Expenses for payment to creditors shall be subtracted from the amounts received by creditors.

Article 30.- Reporting on the implementation of asset division plans

1. Within 7 (seven) working days after the date of completing the implementation of the asset division plan, the leader of the asset management and liquidation team shall make a report on the implementation of the asset division plan, send it to the judge and publicly post it up at the office of the court handling the case.

2. Within 15 (fifteen) days after the date the report on the result of implementation of the asset division plan is posted up, if there is no complaint from creditors, the judge shall issue a decision to terminate asset liquidation proceedings, then issue a decision to declare the enterprise or cooperative bankrupt.

Article 31.- Effect of decisions of leaders of asset management and liquidation teams

1. Decisions issued by leaders of asset management and liquidation teams shall be valid for compliance by all related individuals and organizations.

2. Those who fail to comply with decisions of leaders of asset management and liquidation teams shall, depending on the nature and severity of their violations, be disciplined, administratively sanctioned or examined for penal liability; and, if causing any damage, shall have to pay compensation therefor.

Article 32.- Responsibility of asset management and liquidation teams to pay damages

1. In the course of performing their assigned tasks, leaders and members of asset management and liquidation teams who violate these provisions shall, depending on the nature and severity of their violations, be disciplined or examined for penal liability.

2. If committing violations in the following cases and causing damage, leaders or members of asset management and liquidation teams shall have to pay compensation therefor:

a/ Enumerating assets not in accordance with the practical situation;

b/ Failing to perform or improperly performing their tasks of inspecting and supervising the use of assets, causing loss of assets of enterprises or cooperatives;

c/ Failing to propose the judge to apply interim urgent measures to preserve assets of enterprises or cooperatives in necessary cases, causing loss of assets of indebted enterprises or cooperatives;

d/ Making false lists of creditors or debtors;

e/ Committing acts that cause loss of or damage to indebted enterprises or cooperatives;

f/ Dividing assets not in accordance with the plan already approved by the judge;

g/ Failing to detect and failing to propose the judge to issue decisions to recover assets, the value or the value difference of assets which were illegally sold or transferred as provided for in Clause 1, Article 43 of the Bankruptcy Law;

h/ Failing to observe the provisions of law on auction of assets of enterprises or cooperatives subjected to asset liquidation proceedings;

i/ Illegally using assets of enterprises or cooperatives;

j/ Making untruthful reports on the execution of bankruptcy decisions.

Article 33.- Commendation

Heads and members of property management and liquidation teams who make achievements in the implementation of this Decree shall be considered and commended under the provisions of law on emulation and commendation.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 34.- Implementation effect

1. This Decree takes effect 15 days after its publication in "CONG BAO."

2. The Ministry of Defense, the Ministry of Public Security and the Ministry of Planning and Investment shall coordinate with the Supreme People's Court and concerned ministries and branches in guiding the implementation of this Decree.

3. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, and presidents of provincial/municipal People's Committees shall have to implement this Decree.